Reading Great Leaders Warren Buffett
by Helene Malmsio
Warren Buffet would have to be one of the most fascinating men of our era and one of the most brilliant business minds in America.
I’ve heard so much about him and his partner Charlie Munger, and how humble they are by nature about their brilliant business investment achievements and what voracious readers they are, that I obviously had to grab a copy of this book.
Great Leaders: Warren Buffett is part of a series of short autobiographical books released about famous people around the world in various fields of enterprise, so it should be a quick read.
His wise business investments have resulted in him being a multi-BILLIONnaire. His frugal lifestyle is legendary, still living in the home he bought in the 1960’s in Omaha.
Only Bill and Melinda Gates were able to convince Warren that the time was ripe for him to begin donating some of his money to philanthropic causes. Despite donating billions, Warren is still one of the very richest people in America.
It seems from this book that he can be quite obsessive compulsive, and driven to patterns of repetitive behaviour, happily endlessly studying and tracking results and trends that would numb the brain of most people.
He grew up in an environment of trading as his father was a stock broker, so it was a very supportive foundation for his interests as a child. From his preschool days, he was keenly interested in numbers and money.
And he certainly was enterprising from a very early age, starting many successful ventures and using his profits for his first share trading (in partnership with his sister)
Once he had some successful investment returns in his pocket "he began to see each dollar in his pocket as not one but ten - what it would become if he let it grow."
“His success is based on energy, initiative, and dogged hard work. His boyhood newspaper delivery route meant getting up before dawn, folding the papers to be delivered, and riding his bike for miles in all kinds of weather to fling them onto front porches.
When he made good money, he saved it. Early on, Buffett discovered the miracle of compounded capital and saw each dollar in his pocket as a potential ten-dollar bill if he put it to work instead of spending it.”
“In Ben Graham’s office, he learned to adapt that technique to find “cigar butts,” companies whose stock was trading for less than their assets were worth. He went on to arbitrage, trading to take advantage of discrepancies in prices in different markets. “
“From his days as a paperboy, Buffett had been interested in newspapers. More than once he said that if he hadn’t become a money manager, he would have taken up journalism”
In 1959, he met Charles T. Munger, a lawyer who also ran an investment firm. They often invested in the same companies and began to form a close friendship that has led to one of the most profitable business partnerships known in America.
Many useful and profitable alliances have been formed over the decades by Buffet, and the book details the history and the resultant benefits of various relationships and business dealings.
Buffet has managed to avoid most of the hi tech and banking/mortgage bubble bursts in the markets.
“Don’t think you can outsmart the market,” he said. “Very few people should be active investors.”
The keys to success, he said, are to avoid buying and selling at precisely the wrong times – as most investors wind up doing – and to avoid the high trading fees that eat up profits.
What most people should want is a cross-section of industry that will do well over time. So in the end, the best route for them “is to buy a low-cost index fund and to buy it over time.”
That’s probably not the investment advice most of us want. But as Warren Buffett’s story shows, you ignore it at your peril. And all of us can be grateful to him, both for his example and for his advice.”
“He is endlessly patient through market gyrations. He has made more money by sheer inertia, he says, than by most of his active moves. When he can’t find a deal he likes, he will cheerfully do nothing.”
Some basic lessons from Warren Buffet would be based around:
** Start early, and understand your goal
** Work hard and save your money
** You can never know too much
** Keep a margin of safety
** Look for great businesses, and be patient
** Stick to what you know. Never run with the herd
** Own up to your mistakes
Warren is famous for his three rules of investing:
One, never lose money; two, never forget rule number one; and three, never go into debt.
Warren apparently was slow to develop social skills and dating was a real challenge. He undertook a course of personal development training from the Dale Carnegie School and managed to blossom enough that he could convince Susie Thompson to date him, and he won the weekly Carnegie prize for the student who had overcome the biggest challenges.
In the following years he grew from being shy to becoming a popular and witty public speaker as well.
He and Susie had and interesting (possibly open) marriage until her death and his next marriage to Susie's friend, who had lived in their home for many years beforehand.
“Famously frugal, he has lived in the same modest house for decades and would be happy to live on nothing but hamburgers, potatoes, peas, and Cherry Coke (although he does love flying in corporate jets).”
The book details many of Warren’s most famous trades, both successful and unsuccessful. It makes fascinating reading, but not to write about here.
His most famous investment is Berkshire Hathaway, which has become the trading firm for public shares so we can all benefit from his wise investments.
The shares have fluctuated over the years from $55,000 to around $130,000 per share and are some of the most sought after shares in the world.
Read more reviews of this book by clicking the cover below:
And you can get your own copy of the book here >> Great Leaders: Warren Buffett
Warren Buffett is the most successful investor in history. From his humble beginnings in Depression-torn Nebraska, he became the world's wealthiest man before he started giving away his billions.
But his wealth and power are balanced by self-deprecating wit, a modest lifestyle, and a well-earned reputation for honesty.
In truth, Buffett is far more complex than he appears, and he owes his success to hard work and his ability to spot value that others overlook.
As this short-form book shows, Buffett's insights, principles, and precepts hold lessons from which all investors can profit.
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